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How Evergrande's mythmaking created the illusion of strength

Developer that has sold no cars once created China's most valuable automaker

Evergrande Auto is now valued around HK$30 billion, about 4% of its peak.   © Reuters

China Evergrande Group, a big property developer teetering on the brink of default, has made many efforts over the years to branch into businesses beyond real estate, but what is more impressive is how it has managed to manipulate the capital markets through the stories it created.

One such story was Evergrande as a new-energy carmaker. The market value of China Evergrande New Energy Vehicle Group (Evergrande Auto), which has yet to sell a single car, once surged to as high as 674.1 billion Hong Kong dollars ($86.6 billion), making it not only the most valuable listed car company in China, but worth twice as much as its parent, Evergrande. Never mind that Evergrande has sold several trillion yuan worth of homes over the past 20 years.

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